COLUMN: Don’t give in to ‘Wall of Worry’ over stock market

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Let’s talk about worries.

As a child, in an ideal world, this word should not even be in their vocabulary. It should be a world of wonder, learning, discovery, play and love. We know this is not always the case.

Some children have less than ideal home lives and may not even know if they are going to get fed today. Others witness substance abuse or domestic violence regularly. My own childhood had none of those things thankfully – but looking back, it certainly wasn’t free from worry.

It may sound ridiculous now, but growing up the worry of nuclear war and what it meant was very much present in my mind. It was still very much the Cold War. And our elementary school, St. Peter’s Elementary, had those yellow signs up all over the place that we were a designated fallout shelter.

We had actual drills where an alarm would sound and we’d have to get under our desks. Solid plan, in retrospect. All of this caused a young person to wonder what this was all about, and yes, worry. Who are these Russians? Why do they want to bomb us? What would this mean? Are we all going to die? Heady stuff for a kid.

But as a child, even if these worries do creep in, you tend to not dwell on them and go on to the next thought. When is recess? Will I get to go fishing this weekend? I hope “The A-Team” is a good one tonight. You know, the important stuff.

Today, as adults who are invested in the stock market, there are certainly plenty of worries to be found. In our world, we refer to this as the “Wall of Worry.” And right now, that wall is plenty tall. It contains such things as lingering supply chain problems, political divides, Covid-19, rising interest rates, inflation, the Fed tightening up the money supply, and obviously, the war in Ukraine. Those darn Russians again. And when looking at the recent volatility in the market, it is easy to let these worries amplify, fester and occupy a lot of space in our minds, rent free.

To try and take a page from our younger selves and not let these worries take over our lives, it is important to look back a bit. From 1996 to 2022, the Wall of Worry has been made up of such things as the Asian Stock Crisis, the Dot Com Bubble, 9/11, Iraq War, London Bombing, 2008 Financial Crisis, Brexit Vote and Covid-19. This is certainly not an exhaustive list. Yet, during that time the S&P 500 Index has had an 9.8% annual return.

Have there been negative years in that time frame? Certainly. But a well-diversified portfolio
comprised of value and quality, will have weathered it. It never feels wonderful when you are going through one of the more particularly worrisome and volatile time periods, but to avoid this from causing drastic, unwise, emotional decisions – it’s crucial to remember what we’ve been through and how we have come through it. It’s also important to see the positives as well (very low unemployment, wages growing at the fastest pace in 40 years, very strong retail sales). And also, tap into your younger self.

You’d be surprised at the impact it could have. Play outside. Exercise. Laugh with friends. Have a little ice cream. All of that is better than any pill. Hang in there, better days do lie ahead.

Original content provided by Gregory Mattacola, Esq., CFP, Lead Advisor at Strategic
Financial Services. Content is provided for educational purposes only and should not be used as the basis upon which to make investment or financial decisions. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance is not indicative of future performance.

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